The news that Barry O'Farrell will resign as premier has taken just about everyone by surprise and caused a scramble within the NSW Liberal Party to elect a new leader.

There's been speculation that the two front runners are Treasurer Mike Baird and Transport Minister Gladys Berejiklian and this morning the two candidates have announced they'll be running together.

'We are contesting the leadership and deputy leadership of the NSW Liberal Party with Mike Baird to become leader,' they said in a joint statement.

'We strongly encourage our colleagues to support this decision this afternoon.'

It's unclear who else, if anyone, will run against them.

Earlier Brad Hazzard, the NSW Planning and Infrastructure Minister and Leader of the House, said he didn't expect the ballot to be finalised until this afternoon.

'We have a pool of talent in the Liberal Party...and I don't know who is going to be the candidates finally this afternoon - I've been around long enough to know that that happens when you walk through the party room door.'

He said both Mike Baird and Gladys Berejiklian would be suitable candidates.

'I know both of the candidates...and they're both excellent - highly intelligent, highly capable, caring about the community...their integrity is beyond question.'

Mr Hazzard is standing by his friend Barry O'Farrell and says he advised him not to resign.

'I said to him that I understood that he was judging himself by his own high standards but that he should also think about the fact that his leadership has been absolutely crucial to bringing us from the bottom of the economic pile to the top of the economic pile here in Australia and I said to him that I didn't think he should resign.'

'The bottom line was, he honestly believed and still believes, he has no recollection whatsoever of this particular gift...I spoke to both he and his wife last night and they have no recollection whatsoever.'

'He chose to resign and that's his entitlement obviously as leader and it will be tested this afternoon in the party room.'

You can listen to the full interview with Brad Hazzard on 702 Breakfast using the audio player at the top of the page.